Bootstrap: Amore Gelato

Dhvani DesaiSME Mentor

Only two out of ten gelatos ice-cream brands have survived today in Mumbai in the past 6 years. Amore Gelato is one of them which was founded by a first generation entrepreneur Yasser Ali along with his partner Nayyar Hussain in the year 2006 with a seed capital of 30 lakh rupees invested from their own pocket. This was an idea that got spurred over a cup of coffee, while ordering ice-cream and realizing that India seriously lacked good quality ice-cream.

The opportunity

"My friend and I were sitting over a cup of coffee in Hyderabad while we were about to part ways when suddenly one of us just mentioned 'ice-cream'. We thought of ordering and realized that there really very little options available. And that's when we thought that the country doesn't have good quality ice-cream. And there was no better than now to introduce the Italian version called Gelato," recalls Ali.

The start

"So how did we begin? Well! We looked for the best ice-cream parlour in the city and we realized it was Baskin Robins on Carter Road. We took it up as a challenge and decided to open a store right next to that. We thought if we can’t survive next to the best then we don't deserve to be here at all." Ali challenged himself and later came to Mumbai, had a meeting on carter road, 10 feet from their first outlet in Bandra. 1 year and 3 months later the store saw its first clientele walking in.

Stepping stones

Within that period the duo underwent a thorough research on the current ice-cream industry including the current big players which were Baskin Robins and Natural Ice-cream. "We did all sorts of analysis, researched on the property. I even decided to get my hands dirty and interned with J.W. Marriott’s Italian restaurant in Mumbai." Ali got down to making hand made Gelato there which he thought was a great learning experience.

Both Ali and Nayyar later flew to Italy and got in touch with a local ice-cream maker there Costanzo Malatto. He teamed up with them to oversee their production here.

Braving Challenges

The fundamental difference between a gelato and a regular ice-cream is that gelato is made fresh. "Our ice-creams have a shelf-life of just one day which make the dynamics far more complex than a regular ice-cream. One thing that has really helped us was starting off with a kitchen built in the back of the store," explains Ali. "We would keep limited stock and churn out gelato within 15 minute as when the demand pumped up."

Amore Gelato’s operations were completely boot-strapped which helped them break-even their first store within a span of just 6 months. "Apart from saving on the cost of kitchen I offered to convert my home into an office which was a 5 minute walk from the store. 18 people working out of my living room every morning. The go down was in the guest bedroom. It was a mess."

Where did we go wrong?

"We realized that we hired a lot of highly qualified people in the organization, a great team in the initial phase of our business, but that wasn’t suiting our need. Infact it had backfired on us," Heavy salaries of MBA graduates soon began exceeding their sales. "Things needed to be changed. We needed people and teams that were willing to get their hands dirty rather than just come in with huge academic backgrounds."

Keeping that principle in mind the company decided to replace the entire management team 2 years ago. "It took us a little time. It cost a lot more. But ever since our sales have bounced back," boasts Ali. "Infact we have also tried to instill a sense of belonging among the employees by offering share options to them. And today nearly 20 % of the entire senior management holds shares in the company."

What I learned?

"There is no such things such as mistakes or defeats. In every mistake there is an opportunity for the business. You need to spot it right."

From their first store in 2006 they now have grown to 25 stores across the country with more than 70 employees and a turnover that has crossed 5 crore rupees in the last year.